Hello
This is Charles McShan with Century 21 Universal in Chicago, Illinois. First of all, I want to wish everyone a very happy and safe Summer of 2026. Let me repeat that question. What types of financial documents do I need to sell an HOA Condo/Townhome form of home ownership? Many condo owners forget that selling a condo is different from selling a single-family home. Unlike selling a single-family home, when you sell your condo, you are not just selling that unit; you are also selling a percentage interest in the condominium complex. That form of home ownership falls under the HOA system.HOA, in short, stands for Homeowners Association. Whoever purchases your unit will want to know the overall financial health of the condo/townhouse homeowners association board. They will want to know how much reserve funds you have in the bank.
Please look at the lady in the above photo; she made an offer to buy either a condo or a townhome. Now she is looking at all the documents associated with this property. She wants to look at all the data! It will be up to you, the homeowner, to provide all the necessary documents. This blog post will cover what a homebuyer will want from your homeowner’s association so they can make an informed decision on wheter or not to purchase your condo/townhouse. If you are thinking about buying this form of homeownership in the near future, this knowledge will benefit you. If you are a homeowner thinking of selling your condo or townhouse in the near future, you will now know what documents you will need to complete the deal. With that being said. Let’s get started,
Article Guide
First Things First! What does HOA or Homeowner Association mean?
I found a good article written by the National Association of Realtors; you can access it by clicking this link: https://www.nar.realtor/homeowners-associations-hoas
I wrote a blog post on the same topic a few years ago; feel free to read it also by clicking the link here.>>https://www.charlesmcshan.com/what-does-the-term-home-owners-association-or-hoa-means/
Now that that question is answered, future homebuyers who desire to live in a homeownership model controlled by homeowners’ associations want to know that association’s financial condition up front. They will want to see your resale certificate. That, for the most part, is the seller’s responsibility: providing certain documents for the homebuyer to review. So let’s explore this subject: keep in mind, while this post deals with the homeseller getting these documeents in order, I will also be speaking to the homebuyer so they know what sort of documents are included in this packet.
What forms of documents should this packet include?
1: First and foremost, the homeowner’s packet must include the Unit Deed. This deed will specify the seller’s percentage ownership of the entire complex, as well as which areas are deeded with the unit and which are exclusive common areas. Parking spots may be deeded or, if not, may be assigned by the association. This is an important fact to know if parking is severely limited or if there might be no parking at all. This is especially important if you own one or more cars. You will find this type of situation in many areas of Chicago’s North Side. You might not want to buy a condo in an area where the police frequently ticket, and you can find the Denver boot attached to your car when you wake up and are running late for work.
2:Master Deed. This Deed breaks the complete property into individual units. It spells out the common areas, easements, and how the association will run, along with other things. It will also let the individual owners know what they are responsible for and what they are not. Homebuyers need to make sure they are responsible for replacing doors and windows, not the association. In other words, do your due diligence now so you will not be shocked later.
3:Bylaws. The bylaws are the rules and regulations of the entire property. What is allowed and what is not. I have stated in past blog posts that this form of homeownership is not for people who cannot live by certain rules. Some condo boards tell you what sort of blinds, curtains, or drapes you must have in your windows. Some associations do not allow pets; they control what you can have on your balcony or in your yard. Some say no to flags or satellite dishes. Some condo boards are run by tyrants who fine people for breaking the rules. If you cannot follow rules and regulations, this form of homeownership is not for you.
4: Budget: Providing last year’s budget, as well as the current and next year’s budgets, is a common request. A homebuyer will want to know the board’s financial health. How much money do they have in the reserves? Is there enough money to cover a replacement of the roof, driveways, swimming pools, tennis area, etc? Are there any special assessments coming up? That question comes up a lot. If there is a special assessment pending, who will pay for it, the current owner or the new owner? Do your homework
5: Addendums: Addendums can and will be made to the master deed and bylaws as owners vote on new chages.
6: Meeting minutes: If your condo board meets regularly, you can share that information with the future homebuyer.
7: Association Newsletter.If your board publishes a newsletter highlighting organized events, sales, and other things that would be beneficial to a new home buyer. Here is a question some future homebuyers might be asking. If you need more details on this subject, please click this link: click here
Can I peek at these documents before I make an offer on an HOA condo or townhome?
The answer is no! Under Illinois law, you are legally entitled to review the association’s deeds, bylaws, and financial records immediately upon signing a purchase contract, typically during your designated attorney review or inspection contingency window.
Financial Information: The current operating budget, the most recent balance sheet, and a statement on the association’s reserve funds.
Pending Liabilities: Disclosures of any pending lawsuits, outstanding judgments, or planned capital expenditures.
Insurance Policies: Details on the master insurance coverage maintained by the association.
What are the legal guidelines, laws, and rights?
- Seller’s Duty: The obligation to provide these documents falls on the seller. Once requested, the association or property management has up to 10 business days to furnish the packet.
- Review Period: After the documents are officially delivered, buyers usually have a strict rescission period (commonly 3 to 5 business days, depending on the contract). If the documentation reveals unacceptable financial issues, rule restrictions, or structural problems, you can legally void the contract and recover your earnest money.
- Under Illinois law, associations must disclose more than just formally approved projects. They are also required to report any capital improvement or repair that the board reasonably believes will occur.
Now, back to the homeseller.
Now, as you just read, by law, you must provide the above documents to the homebuyer who agrees to purchase your home, and this is governed by the Homeowner Association rules. A strong association with well-run management can be a big selling point when selling your condo. First, check which documents you were provided with when you purchased your home. If you find that you have misplaced some documents, contact your management company ASAP to request them. Some management companies charge a fee for this service. This fee could be small or quite high. In the state of Illinois, section 22.1 of the Condo Act caps the fee at a base fee of $375.000.If you need the documents rushed within 72 hours, the board can charge you an extra $100.00. So get your wallet ready.
Keep this point in mind. This is not a form you fill out. It is a packet your Homeowner’s Association management company assembles. It can run anywhere from 30 to 200 pages, depending on the building and what has been happening inside it. You do not get to choose what goes in. That could be one reason why, depending on the building, your cost could top $375.000.You, the homeseller, must absorb these costs.
How do I get my condo building’s financial status?
Under the Illinois Condominium Property Act (765ILCS605/19), you, as an Illinois condo owner, have the legal right to inspect all bylaws and financial disclosures after submitting a formal written request. You must submit a formal written request to the board or property manager stating that you need these records, and they must provide or grant access within 10 business days. So please follow the steps below
1: Submit a written request for Documents for the bylaws, declaration, recent budgets, income/expense reports, deeds, plats of survey, all amendments, etc.Also, meeting minutes for the last 7 years, along with all financial books and records for the current and 10 preceding fiscal years.
2:State your purpose. Under the Act, you must state with particularity a proper purpose for the request. You need these documents to verify the building’s financial health for a pending sale.
3: Sign a Certification. The board may require you to certify in writing that you will not use this delicate knowledge of the property for commercial use or to solicit.
4:Follow Up. Send this file via certified mail, FedEx, UPS, or any trackable service to provide proof of the date you sent it and the date they received it.
Suppose the board refuses to give you the financial documents.
Sometimes, certain Association boards will refuse to give over these documents to the owners of the condo units. Here is what you should do.
1: Escalate with a formal letter. Send a formal letter requesting the documents again, and this time let the board know they have a fiduciary duty to maintain adequate reserves and keep the owners informed.
2: Mediation. File a formal inquiry or request assistance from the IDFPR Condominium and Common Interest Community Ombudsperson, which helps mediate disputes between unit owners and associations.
3: Consult Legal Counsel. Speak with an attorney specializing in Illinois condo law to send a legal demand or file a lawsuit to enforce your right to inspect your reserve fund records.
Conclusion!
If you did not know it beforehand, you now understand the term. Homeowner’s Association, or HOA. If you are planning to sell your condo or townhome in a Homeowners Association form of ownership, you must prepare to obtain your HOA resale package. If your board refuses to give you these documents before you have a sales offer, you can always contact the board and ask them how much they have in reserves to deal with an emergency. You will not regret it, and if your building’s reserves are in good shape, that could be what causes your deal to close more quickly.. I hope both homesellers and home buyers got something of value from this blog post, and I will see you again soon. For reading this post, feel free to download my Summer 2020 home seller and home-buying guides below and share them through your social media channels.
Thank you, and take care
3129143678
cmac2121@yahoo.com
